Distinct Business Entity

AAA

DEFINITION of 'Distinct Business Entity'

A sub-division within a company that is completely autonomous from the rest of the company. The distinct business entity will have complete control over how it utilizes its assets, organizes its management and the most appropriate financing structure if required.

INVESTOPEDIA EXPLAINS 'Distinct Business Entity'

A distinct business entity will most likely be segregated from the rest of the company based on some operational distinction, such as having a separate product line, being geographically segregated or by offering a different service then the rest of the company.

Distinct business units can be a key element for any firm, as these units have the flexibility to make daily and high level management decisions at the operational level, which frequently yields better decision making. They can take the forms, such as a corporation, association or business trust.

RELATED TERMS
  1. Cost Of Capital

    The required return necessary to make a capital budgeting project, ...
  2. Business

    1. An organization or enterprising entity engaged in commercial, ...
  3. Business Model

    The plan implemented by a company to generate revenue and make ...
  4. Capital Budgeting

    The process in which a business determines whether projects such ...
  5. Asset

    1. A resource with economic value that an individual, corporation ...
  6. Capital Loss Coverage Ratio

    The difference between an asset’s book value and the amount received ...
Related Articles
  1. How To Create A Business Succession ...
    Entrepreneurship

    How To Create A Business Succession ...

  2. The Flow Of Company Information
    Investing Basics

    The Flow Of Company Information

  3. All About EVA
    Options & Futures

    All About EVA

  4. Introduction To Fundamental Analysis
    Markets

    Introduction To Fundamental Analysis

comments powered by Disqus
Hot Definitions
  1. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
  2. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  3. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  4. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  5. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  6. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
Trading Center